Metal Scrap Trade Corporation v. Kate Shipping Co. (The Gladys) - House of Lords (Lord Mackay of Clashfern, Lord Chancellor, Lord Bridge, Lord Brandon, Lord Oliver and Lord Goff) - 25 January 1990

Disputed ship sale contract - Arbitration proceedings commenced by sellers for breach of contract - Originating Summons issued by buyers to determine whether there was a valid sale contract and a valid arbitration clause - Whether sellers permitted to serve a Counterclaim to the Originating Summons

The sellers were formerly the owners of the vessel Gladys . In 1982 negotiations took place in Calcutta for the sale of the vessel by the sellers to the buyers for scrap. There was a dispute between the parties as to whether those negotiations resulted in a concluded contract, and, if they did, as to whether such contract had incorporated into it by reference a clause providing that English law should apply to the contract and that all dispute arising under it should be decided by arbitration in the United Kingdom.